Con Edison Drops Bid to Raise Rates

Con Edison dropped its bid to raise rates on New Yorkers Tuesday, announcing a settlement with city and state leaders that would freeze electric and steam bills.

The utility – which serves three million customers in New York City and Westchester – had asked the state’s public service commission to allow rate increases of about 4% for electric customers and 1.5% for gas customers.

Tuesday, it agreed to forgo the increases on electric rates for two years and steam rates for three years, pending approval from the Public Service Commission. The commission will vote on the settlement next year. There is universal agreement on the settlement from the city, state and utility, and staff members from the Public Service Commission signed onto the agreement.

“This is a clear victory for consumers and businesses, particularly those who suffered through power outages from Superstorm Sandy last year,” Governor Cuomo said in a news release.

The utility’s proposal to raise rates became increasingly controversial earlier this year, when Mr. Cuomo wrote a letter urging the commission to reject rate increases, calling them “not warranted.” Officials from Mayor Michael Bloomberg’s administration had also questioned the rate increases, saying in sworn testimony earlier this year that the utility wasn’t doing enough to gird itself from future storms.

Michael Clendenin, a Con Edison spokesman, said the utility will move forward with its $1 billion plan to harden equipment after superstorm Sandy. It previously said the rate increases would help pay for that work.

Mr. Clendenin said Tuesday the utility had received more than $100 million in property tax assessment refunds from the city earlier this year – and will use that money to fund resiliency measures. He also said Con Edison will save money in federal taxes because of depreciating equipment.

“We’re also pleased that most of our customers will see little or no change in their delivery rates for electric service for two years, nor in the delivery rates for their gas and steam service for three years,” Mr. Clendenin said. “Lower financing costs and our continued focus on cost savings will help to offset rate increases and help fund our storm hardening programs.”